The nonprofit sector has grown dramatically in the last two decades and part of that trajectory has involved the growing use of technology. However, author Steve MacLaughlin argues that nonprofits aren’t using data nearly as much as they could be to move their missions forward.
His new book, Data Driven Nonprofits, focuses primarily on fundraising as the critical element needed to advance an organization. In each chapter, MacLaughlin uses interviews and case stories to explore the variety of ways in which nonprofits, big and small, use data to accelerate change.
We asked MacLaughlin about his favorite example of a nonprofit that uses data to move their mission forward. Learn more about his answer to this question and others below:
CausePlanet: What case story or interview about making the “data leap” is your favorite and why?
SM: There are a lot of really great stories of organizations that have been able to transform their performance through better use of data and analytics. One of my favorites is Denver Rescue Mission, which was founded in 1892, and up until the late 1980s had a staff of four people and total revenue of about $200,000. Today, they raise more than $32 million—so much of that growth has come through being data driven with a growth mindset.
CausePlanet: Where do most nonprofits typically falter when trying to take their initial steps toward using data effectively and why?
SM: One of the biggest mistakes is trying to take on too much, too soon, with expectations that are too high. Nonprofit organizations are much better served by picking a specific question they want to answer or outcome they want to achieve. That first project should be big enough for others to care about, but not so big that it becomes controversial or bogged down in bureaucracy. Time box the team to 30 days to work on that question or outcomes, then come back with recommendations. Over time, you’ll build the right habits and processes to take on the next important problem.
SM: Yes, a big finding from my research and interviews for Data Driven Nonprofits was how big a role organizational culture plays in the success of being more data driven. As you noted, some of those culture types are around testing, sharing, and growing. The bad news is that a nonprofit’s culture must align around and value data. The good news is that nonprofits can have different culture types and still achieve their goals.
CausePlanet: Many important changes or initiatives require buy-in at the top. What three reasons should our readers present to their boards as to why they need to be data-driven?
SM: It’s important, but it’s not the most important thing to being successful. The most important things people can show to senior leaders or their board are examples of how using data produces a better decision or result than just an opinion. Speak softly. Bring data.
CausePlanet: What single idea would you like readers to know about your book?
SM: Equifinality. That’s the single idea that readers should take away from the book. (Pausing for reaction) It turns out that you can have the best data, the best tools, the best people, and still not be successful with data. Organizational culture can undermine any of those efforts. But thanks to equifinality there is hope. Equifinality is the principle that a given end state can be reached by many potential means. Nonprofit organizations have different culture types and still become more data driven. They can start in different places and arrive at the same positive place.
Learn more about this book, related books and our summary: